A Small Start to QE3?

Our concerns about the slow start to QE3, i.e, only US$5 billion net since mid-September or nearly US$150 billion short of 'target'. Has been eased a tad by last week's jump in net debt holdings by the Fed of US25-30 billion. This together with signs of movement from the EU on Spanish debt suggests that markets may get the reassurance they need by year-end. We continue to expect that this 'second wave' of liquidity comes in during 2013. Risk asset markets will response accordingly.